Argentina Economic Outlook
November 6, 2018Although the economy remains mired in recession, the latest political developments and available economic data provide a glimmer of optimism. On 25 October, the lower house of Congress approved the 2019 austerity budget, and the following day the IMF formally approved the revised standby agreement. Meanwhile, financial markets seem to have welcomed the new monetary strategy, with the net demand for foreign assets moderating in September. Moreover, the contraction in economic activity softened further in August, partly due to recovering agricultural output, and in September the trade balance recorded a surplus after 20 months in the red. On the fiscal side, the primary deficit narrowed considerably in January–September. Nevertheless, with sky-high interest rates weighing on credit and rising inflation significantly hitting consumer spending, the road to recovery will be long and arduous.
Argentina Economic GrowthThe economy is expected to remain in recession next year, as the fiscal adjustment and high interest rates depress public and private investment, while elevated inflation weighs on household spending. Macroeconomic imbalances, however, should narrow: Higher agricultural exports and contracting domestic demand are set to reduce the current account deficit, while tighter fiscal policies should translate into a smaller fiscal deficit. Restoring investor confidence, however, is key and an unfavorable political outcome in next year’s elections and capital flight loom over the outlook. LatinFocus Consensus Forecast analysts see the economy contracting 0.5% in 2019, down 0.4 percentage points from last month’s estimate, before rebounding to 2.7% growth in 2020.
Argentina Economy Data
5 years of Argentina economic forecasts for more than 30 economic indicators.
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|Bond Yield||6.69||0.15 %||Dec 17|
|Exchange Rate||36.06||0.45 %||Nov 15|
|Stock Market||30,474||2.26 %||Nov 15|
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Argentina Economic News
November 16, 2018
According to the National Statistical Institute (INDEC), national consumer prices rose 5.4% over the previous month in October, coming in below September’s 6.5% month-on-month increase, which had marked the fastest increase in prices since April 2016.
November 7, 2018
Industrial production contracted 11.5% in September over the same month of last year, according to data released by the National Statistical Institute (INDEC) on 6 November, a sharper fall than August’s 5.6% year-on-year decline and marked a multi-year low. September’s reading reflected more severe contractions in almost all components of the index.
November 5, 2018
On 26 October, the IMF formally approved the upgraded standby agreement (SBA) announced in late September, which should cover the government’s financing needs for 2019 and grant President Mauricio Macri some breathing room ahead of next year’s general election.
October 26, 2018
The Universidad Torcuato di Tella (UTDT) consumer confidence index fell to 32.6 points in October from 33.7 points in September, marking the worst reading since September 2002.
October 26, 2018
The monthly indicator for economic activity (EMAE, Estimador Mensual de Actividad Económica) contracted 1.6% in annual terms in August, a much softer drop than the 2.7% fall recorded in July.